ECI Approves Buyout

PETAH TIKVA, Israel -- ECI Telecom Ltd. (NASDAQ: ECIL) today announced that at its extraordinary general meeting of shareholders held today, the ECI shareholders voted to approve the transaction contemplated by the Merger Agreement, dated July 1, 2007, under which ECI will be acquired by affiliates of the Swarth Group and certain funds that have appointed Ashmore Investment Management Limited as their investment manager After closing of the Merger, which is expected in the fall of 2007, ECI will become a private company and each ECI share outstanding at consummation of the Merger will automatically be converted into the right to receive US$10.00 in cash (subject to applicable withholding taxes). The shareholders also approved the payment of a special bonus in the amount of US$1,050,000 to Shlomo Dovrat, the outgoing Chairman of the Board of ECI (or to an entity designated by him).

In connection with the proposed merger transaction, ECI has obtained a pre-ruling from the Israeli Tax Authority with respect to the withholding obligations relating to the merger consideration. According to the pre-ruling, subject to certain exceptions, ECI shareholders that are "Israeli Residents" (as defined under Israeli law) will be subject to withholding tax at the rate of 16% and ECI shareholders that are "Non-Israeli Residents" (as defined under Israeli law) will be fully exempt from Israeli withholding tax. More detailed information and a declaration form to be signed by each shareholder will be included in the transmittal letter to be sent to shareholders following the consummation of the merger transaction.

ECI Telecom Ltd.